Government figures

The numbers game

The government is keen on figures. That does the figures no good

BRITAIN'S undeclared general election campaign has already seen the politicians trading numbers as boxers trade punches. There is nothing new in such statistical slanging matches. What is new is an underswell of worry about what has been happening to official statistics under the Labour government.

One of the most important figures for Gordon Brown when presenting his pre-election budget on March 16th was the current-budget balance. This is the gap between current revenues and current spending. It matters to the chancellor of the exchequer because he is committed to meeting his own “golden rule” of borrowing only to invest, so he has to ensure that the current budget is in balance or surplus over the economic cycle.

Mr Brown told MPs that he would meet the golden rule for the current cycle with £6 billion ($11.4 billion) to spare—a respectable-sounding margin, though much less than in the past. However, the margin would have been halved but for an obscure technical change announced in February by the Office for National Statistics to the figures for road maintenance of major highways. The ONS said that the revision was necessary because it had been double-counting this spending within the current budget.

Oliver Letwin, the Conservative shadow chancellor, pointed out that the timing of the ONS decision was “very convenient for the government”. The ONS said that it was duty bound to correct numbers that were wrong. However, it also revealed that it had been aware of the problem since late 2002, which raised a question about the long delay in addressing it. The ONS explained that it had been seeking to agree a common approach with European statistical offices.

If this were an isolated incident, then it might be disregarded. But it is not the first time that the ONS has made decisions that appear rather convenient for the government. Mr Brown aims to meet another fiscal rule, namely to keep public net debt below 40% of GDP, again over the economic cycle. At present he is meeting it but his comfort room would be reduced if the £21 billion borrowings of Network Rail were included as part of public debt. They are not thanks to a controversial decision by the ONS to classify the rail-infrastructure corporation within the private sector, even though the National Audit Office, Parliament's watchdog, said its borrowings were in fact government liabilities.

As with the road-maintenance episode, the ONS denied there had been any political interference. It said it had followed European standards in determining that Network Rail belonged to the private sector. But whatever the rights and wrongs of the two decisions, they have left the ONS struggling to explain them. “Both incidents put a question-mark over the capacity of the ONS to demonstrate its integrity and independence,” says Richard Alldritt, chief executive of the Statistics Commission, an advisory body.

These stories are linked by a larger political theme. When Labour came to power, it took the view that governments thought too much about inputs, and not enough about outputs. It therefore set a range of targets for the public sector, which include Mr Brown's fiscal rules, and hundreds more besides. As a result, its credibility is bound up with the official figures that measure how it has performed against these targets.

This makes it particularly worrying that the official figures can show one thing, whereas the public experiences another. One of the highest-profile targets for the NHS is that no patient should spend more than four hours in a hospital accident and emergency department. Government figures show that by mid-2004, the target was being met for 96% of patients. But according to a survey of 55,000 patients by the Healthcare Commission, an independent body, only 77% of patients said they stayed no more than four hours in A&E.

The worry is that the official figures start to reflect a parallel world created by administrators striving to hit the target. A report by the Public Administration Committee of MPs in 2003 cited evidence where targets for A&E maximum waiting times “were being circumvented by imaginative fixes”. A recent survey by the British Medical Association of A&E departments found that only 26% thought the figures submitted for the waiting-time target were a true reflection of their performance.

The more that ministerial reputations ride on statistics, the more protection statisticians need from political interference. Current arrangements fail to deliver that protection. A code of practice states that decisions on statistics are for the National Statistician to make. However, the ONS is formally one of the chancellor's departments; the National Statistician, who heads the ONS, is ultimately accountable to the chancellor. There is no independent scrutiny of the government's performance against targets.

One way to help restore public confidence in official statistics would be to make the ONS independent, as the Conservatives and Liberal Democrats have suggested. Another would be for the National Audit Office to assess how the government has been performing against targets, as the Public Administration Committee has recommended.

Recent data suggest there is a need to restore public faith in the numbers. In an opinion poll last October, 68% of respondents said they believed official figures were changed to support a particular argument; 58% thought there was political interference in their production. It isn't just the statisticians whose reputations suffer as a result. The government hoped to use figures to prove to voters how well it was doing. But if the voters don't believe the numbers, it can't.